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ASIAN INTELLIGENCE An Independent Fortnightly Report on Asian Business and Politics No.
1,072 Wednesday July 14, 2021 REGIONAL OVERVIEW .......................... 2 PHILIPPINES .......................................... 10 CHINA ......................................................... 3 SINGAPORE............................................. 11 HONG KONG ............................................. 4 SOUTH KOREA ....................................... 12 INDIA .......................................................... 6 TAIWAN ................................................... 13 INDONESIA ............................................... 7 THAILAND .............................................. 15 JAPAN ......................................................... 8 VIETNAM ................................................. 16 MALAYSIA ................................................. 9 EXCHANGE RATES ................................ 18 POLITICAL & ECONOMIC RISK CONSULTANCY LTD. Movement Toward Greater Stability in AsiaUS has destabilizing impact on AsiaChina has destabilizing impact on AsiaChina has stabilizing impact on AsiaUS has stabilizing impact on AsiaJuly 2020July 2021 Political & Economic Risk Consultancy, Ltd. Issue #1,072 REGIONAL OVERVIEW Impacts of the US and China on Asia A year ago in Asian Intelligence, we raised the possibility that a scenario framework we had been using for over a decade as a prism through which to view how different events might change Asia in meaningful ways was losing its usefulness.
That model was based on two driving forces shaping Asia.

One is China; the other is the US.

Each country had the ability to have either a destabilizing or a stabilizing impact on Asia, and the intersection of these two possibilities can be represented in a two- dimensional scenario grid as shown on the cover of this report.
how very quickly important Admittedly, this is an oversimplification for a backdrop against which to evaluate the impact of different developments on Asia, but it is still a useful model and stood the test of time in helping us to evaluate (or insignificant) many developments might be in forcing certain types of change in Asia.
However, the problem with the model was that recent years had seen both China and the US adopt policies that were pushing Asia to an extreme position in the lower left quadrant – a position where the impacts of both the US and China were highly destabilizing.

The two driving forces seemed to be less critical points of uncertainty shaping Asia than givens that had to be managed.
To classify as a “critical variable,” the factor needs to meet two criteria: first, it needs to be very important to the question being asked; second, its level of uncertainty needs to be high.

The impacts of China and the US remain extremely important, but a year ago both the US and China seemed to be heading inexorably in the direction of destabilization.
This meant they were not so much variables as “givens.” We therefore started looking for other critical variables that could serve as parameters defining possible futures for Asia rather than factors that would figure prominently in any of the futures Asia could experience.

However, in view of what has happened during the past year, we might have been premature in abandoning the long-standing scenario grid based on the impacts of China and the US on the region.
To be sure, some developments in China and the US have been further destabilizing for Asia.

For example, China’s failure to spot and stop COVID-19 before it could spread throughout the world and shock every country in the region was highly destabilizing.

So were the actions of the Trump administration that undermined global confidence in the quality and durability of the US democratic system, and hurt the traditional alliances of the US.
Moreover, the new administration headed by President Biden has continued to pursue hawkish policies against China that have so far failed to resolve any outstanding trade issues but have heighten security risks relating to Taiwan, North Korea and the South China Sea.

On balance Asian governments have responded in one of three ways.

Some such as Japan and South Korea have moved closer to the US and have become more open in supporting Washington’s criticisms of China’s actions.
Some, most notably Hong Kong but also the Philippines and Thailand, have moved closer to China.

including Singapore, Indonesia, and Malaysia, have tried to redefine their old Cold War definition of “neutrality” to apply to a new world in which the main confrontational relationship is between China and the US.

The new neutrality emphasizes maintaining stable and friendly relations with both Powers, and using trade, investment and other economic benefits.
those relationships to maximize Most, the US-based While Asian governments are adapting to the changes taking place in the US and China, Asia’s general populations are also changing their views of both countries and their governments.

The country entries that follow look at how those views have shifted over the past year, based on a recent survey by Center Pew Research In general, Pew (https://pewrsr.ch/3xbA74H).
found that views toward China and its leadership have not changed much over the past year, while those toward the US and its new government have turned more positive.

Pew was not able to cover all Asian countries in its surveys, so for those that were not included, we tried to gain insights from other sources about how the images of the US and China have changed.
Page 2 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd. – grid where scenario In general, it would seem that there has been significant movement back toward the center of our old the stabilization/destabilization axes of the US and China intersect, which means the model retains usefulness as a benchmark assessing directional changes in Asia in the future and the likely impact of specific developments, including exchange rate movements of the US dollar and the Chinese yuan, US interest rate changes, China’s management of its debt, and the impact of major programs like China’s Belt and Road Initiative and the alternative to this that the US is currently trying to organize.
There are many reasons why movement in the past year has been back toward the center of the grid instead of to an even more extreme position in the bottom left quadrant.

COVID-19 might have started in China, but Beijing did a good job of getting its economy moving again.

The US might have been slower to contain the virus, but the steps it has taken to shore up the economy have had an even bigger positive impact on global growth and trade trends than has China’s recovery.
Vaccines developed in the US and China will ultimately play a critical role in getting the pandemic under control in the rest of Asia, which would mean further movement in the direction of stability, including an increase in tourism flows, higher levels of direct investment, and an environment in which different governments can meet face-to-face more frequently to iron out differences and decide on ways cooperation and coordination can be promoted better.
Despite even intensifying differences, the US and China are still continuing their and looking for common ground – and they have found some.

Both governments have agreed to cooperate more in fighting global climate change.

China has even indicated it might cooperate with the US and other countries in backing a global minimum tax.
Despite major trade disagreements and an escalation of tensions between Washington and Beijing, the US in on course to ship a record US$37.2- billion worth of farm goods to China this year.

Even major points of disagreement have the potential to have a stabilizing impact on Asia.
For example, US steps to restrict access of Chinese companies to the US stock market are not really at odds with China’s attempts to rein in Chinese tech companies and their reliance on US IPOs, and as both governments pursue their own interests on these issues, Asia’s capital hubs like Hong Kong and Singapore could benefit, and the Chinese companies will be looking more to these centers to restructure and develop their businesses.
Not enough progress has been made yet to say that Asia has moved back into the first quadrant of the scenario grid, and it would be debatable to claim that China is having a more or less destabilizing impact on the region than is the US.
But the countries of Asia are looking at both China and the US with a greater degree of optimism today than they were one year ago that these Powers will help them strengthen their economies and deal with problems that, if unaddressed, could result in greater social and political instability in the future.

CHINA Comments One of the biggest holes in the most recent Pew survey assessing the relative international images of the US and China is that it excludes any opinions by Mainland Chinese.
Views of Americans are included: what they think of their own country as well as of China.

It would be interesting if the opinions of average Mainland Chinese are the mirror opposite of those of Americans.

Would 76% of Mainland Chinese hold a more favorable view of the China than the US and only 20% hold a more favorable view of the US than China?
Would 60% of Mainlanders have confidence in President Xi to do the right thing regarding world affairs and only 15% have more confidence in President Biden than President Xi?
Would they be evenly split like Americans in their relatively negative views for how China and the US have handled the COVID-19 pandemic (the mirror opposite of July 14, 2021 ASIAN INTELLIGENCE Page 3 Political & Economic Risk Consultancy, Ltd. Issue #1,072 the US on this question would have 42% of Chinese respondents saying China has done a good job handling the pandemic, while 43% would credit the US as having done a good job)?

The answer in some cases is probably yes, while in other cases it is no.
If the Chinese respondents felt confident in being able to reply to such questions without fear of being punished by the government for views that are not in line with Beijing’s thinking (which is unimaginable in current conditions), the majority of Mainlanders would still probably have a more favorable view of China than the US.
We suspect Mainland respondents might have had more confidence in President Xi than Americans expressed in President Biden – if only because the US population is highly polarized in the opinions about Democrat vs. Republican leaders.

In general, the Chinese public is much more united and confidence in their own political and economic systems seems to be growing, while US confidence in the way its economic and political systems are performing has been weakening.
On the other hand, Chinese views about how the Mainland and the US have handled the pandemic would probably be very similar.

Those are our guess of how Chinese might respond honestly to such questions.

The reality is that many if not most respondents would not respond honestly, and many would refuse to give any response at all.

They would be too fearful of the authorities somehow monitoring their opinions and punishing them for any criticism they might make.
Moreover, that Pew could not conduct such surveys in China in the past speaks volumes about the system there.

It is not just the pandemic making it difficult to conduct such research; China’s government would not allow a foreign organization – especially one based in the US like Pew – to conduct this kind of work in China.
In a country like China, where the government has critical means to shape public opinion but in which the public has relatively limited means to express their political opinions, , the Chinese public relies overwhelmingly on the official media for daily information, and the Chinese Communist Party and the government play a central role in determining what information is made available to the public.

This is especially true when it comes to foreign policy issues and anything that relates to the US.
Alternative sources of information such as internet and commercial media organizations are also filtered – and growing more so as time goes on and the government’s monitoring and censorship capabilities increase.

HONG KONG Comments The past year has seen Hong Kong being pulled even more firmly into China’s sphere of influence.

The SAR has unique characteristics that other cities in China do not have, so in this regard, the “one country, two system” model that is supposed to apply to Hong Kong still does.
However, China has exerted its influence over Hong Kong’s major institutions and changed the independence of the SAR’s legal system so much by forcing through a new national security law that it has lost the confidence of many foreign companies in the degree of autonomy that exists enough to prompt them to review their use of Hong Kong for such functions as arbitrating their disputes, offering certain online services, and locating certain functions.
Some are deciding that Singapore is where they should be focusing their future expansion rather than Hong Kong, while some others are deciding it is better to expand in more politically-connected Mainland cities like Shanghai and Beijing rather than from a more distant Hong Kong.
Because of China’s increasing influence over what is and is not permissible in Hong Kong, there is more self-censorship today than one year ago, schools are changing what they teach students, the local political system is dominated more by pro-Beijing politicians and civil servants.

Indeed, being seen as pro-Beijing is increasingly a requirement for a widening range of senior and even middle-level leadership positions.
The increase in Page 4 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd. China’s influence and control also has its benefits.

Hong Kong’s role as a financial hub has been strengthened by a boom in stock issuance thanks in part to a flurry of big Chinese IPOs and a number of secondary listings by tech companies from China.

In the first quarter of this year, the local stock exchange operator notched its best ever quarterly profit.
Similarly, the strain in US-China relations is also benefitting Hong Kong in some ways.

For example, a major reason for the upturn in activity on Hong Kong’s stock market is because of growing hostility towards China in Washington and the increase in scrutiny being given to Mainland firms listed in the US.

This has reinforced Hong Kong’s role as an offshore fundraising center.
Still, looking back on the past two years – the past three years, in fact – it depends entirely on one’s perspective if China’s policies have had a stabilizing or destabilizing impact on Hong Kong.

From the perspective of democratic activists in Hong Kong, China’s impact has definitely been negative.

Those Hong Kong Chinese and expatriates who consider Hong Kong to be a less desirable place to live and are therefore leaving for other countries would share this view.
On the other hand, many companies and households were happy to see an end to the disruptive demonstrations, which they feared – correctly – would only result in China’s becoming even more determined to assert controls over the SAR.

However, this disruption from political demonstrations was replaced by even more complete disruption caused by the COVID-19 pandemic, the source of which could again be blamed on China.

However, life is slowly returning to normal.


The government has helped people financially cope with the crisis.

The local real estate market has stabilized and prices and rents are rising again.

Restaurants and schools have re-opened – and despite the interruptions of the past year – Hong Kong students have once again excelled in exams.
On balance, it is reasonable to place Hong Kong somewhere near the middle of the vertical axis of our old scenario grid – a position that shows China having both a stabilizing and destabilizing influence but without one really dominating at this time.

Many people might deny that this is an improvement, but this axis was never intended to measure that.
It has always been a measure of China’s influence on stability in Hong Kong, and the level of stability today is better than it was one, two and three years ago.

Similarly, the impact of the US on Hong Kong has also been more stabilizing over the past year.

Mostly, the positive impact of the US on Hong Kong has been indirect or unintended.
The success of the US in developing and rolling out vaccines against COVID-19 that are even more effective than the vaccines developed in China has helped Hong Kong deal with the pandemic better than would otherwise have been the case.
And while China’s speed in stabilizing its economy has certainly been good for Hong Kong, the continuing low level of US interest rates and the ongoing strength of the US economic recovery are doing more to shore of global economic growth, including Hong Kong’s, than is China’s recovery.
However, while Hong Kong has moved from left to right along the horizontal axis in the scenario grid, indicating a more stabilizing impact of the US, it is still probably not back fully to the middle of this axis, and there is a risk that US could adopt policies that are negative for Hong Kong.

Most likely, those policies would be designed to punish China for its treatment of Hong Kong.
Such actions would almost certainly not cause China to modify its approach to Hong Kong in any way, but it could make life more difficult for individuals and businesses in Hong Kong.

For example, instead of emigrating from Hong Kong through normal channels, there is a risk that more Hong Kong activists might try to claim political asylum in the US and other countries.
The Biden government has already showed that it is trying to get allies like Japan, Canada, Australia and the EU to become more critical of China because of its Hong Kong policies, and this group approach is really pushing Hong Kong more firmly into the China bloc.
What Hong Kong really wants, like Singapore, is to be able to do business with both China and the US, since that is the best way to promoted its credentials as a business center, but Hong Kong is in a much weaker position than Singapore to walk this kind of tightrope.
July 14, 2021 ASIAN INTELLIGENCE Page 5 Political & Economic Risk Consultancy, Ltd. Issue #1,072 INDIA Comments COVID-19 and the shortcomings of the Indian government in dealing with the pandemic effectively have been very destabilizing for the country.
They have seriously undermined the economy, hurt the local popularity of the BJP government of Prime Minister Narendra Modi, and made India look like the weakest link in the “Quad” alliance of democracies (Australia, the US, India and Japan) trying to act as a counter-balance to China in the region.

Meanwhile, India’s own relationship with China has continued to deteriorate, while average Indians probably have even more negative feelings toward the Mainland than they did before the pandemic.
Because the virus remains rampant in India, Pew was unable to include the country in its latest survey.

A year ago, Indian respondents held some of the most negative views of China of any country in the world.

Only 23% of the Indian respondents in late 2019 said they had a positive view of China.

This compared with 60% who said they had a positive view of the US.
Considering that Indians blame China for being the source of the pandemic in the first place and border tensions have escalated, it is hard to believe that negative views toward China have done anything but increase over the past year.

During the early days of the pandemic, India had visions being able to reap some benefits from China’s misfortune.
First, it had plans of working with the US and Europe to use its pharmaceutical factories to produce vaccines that would be more effective than what China could produce and could give India a lead role in supplying the vaccine to developing countries around the world, scoring India a public relations coup over China.

At the same time, India also positioned itself to work with the US, Japan and Australia to resist Chinese economic and military aggression in the Indo-Pacific region.
However, as the pandemic deepened in India, Prime Minister Modi had to abandon these ambitions.

Some of the country’s weaknesses, especially compared with China, were embarrassingly exposed.

It was unable to match the speed with which China contained the virus domestically.

India’s economy has not only slowed more and for longer than China’s, but also it has failed to attract the inflow of direct investment that it had hoped would be moving out of China.
Instead of defeating China in vaccine diplomacy, India could not even produce enough to inoculate its own population and New Delhi imposed a de facto ban on commercial vaccine exports.

Finally, India’s image as a country with the military capability to help counter China’s spreading influence even in India’s own backyard has been tarnished by its inability or unwillingness to participate as an equal member of the Quad group.
In March this year, all the four countries collectively in a joint statement announced that they shared a vision for a “free and open Indo-Pacific,” and a “rules-based maritime order in the Indo-Pacific.” Still, at the upcoming Exercise Talisman Sabre 2021 (TS21) scheduled to be held near Australia this month and in August, India will have only observer status, while forces from Japan, Australia and the US will all be active participants, along with New Zealand, Canada, South Korea, and the UK.
Admittedly India is the only nation in the Quad that has engaged in a direct military conflict with China in recent years.

There have recently been skirmishes between troops of the two countries in the disputed border in the Himalayan region.
China has initiated these limited military clashes, but that is less a sign of their ranking on Beijing’s list of territorial dispute priorities than it is of China’s confidence that its disputes with India will not blow up into major military conflicts that could ultimately embarrass China.
India can take some credit that its troops have held their own in these clashes, but the fact that China feels confident enough to instigate them to underscore its determination in sovereignty claims is a sign of Beijing’s perception of India’s weakness rather than its military strength.

Page 6 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd.
The implication is that movement up the vertical axis of our scenario grid – measuring China’s impact – has been limited in the past year.

India is still deep in the lower half of this axis, which means China is still destabilizing.

There may have been movement to the right along the horizontal axis measuring the impact of the US, but if that is the case, it has been limited.
That is mainly because Mr. Biden has tried to work more closely with allies, including India, and the improvement of the US economy should benefit India.

However.

New Delhi so far has not been able to reciprocate much due to the pandemic.

INDONESIA Comments One of the main obstacles China is facing in increasing its influence in Indonesia is a deep suspicion of China by many average Indonesian Muslims and strong anti-Chinese feelings by many native Indonesians that are never far beneath the surface.
The Indonesian government has its own reasons for being wary of China, especially since China’s push to establish its sovereignty claims in the South China Sea keeps bumping against Indonesia’s sovereign territory, resulting in frequent incursions by Mainland fishing boats in Indonesia waters, but recent governments in Indonesia, including the current one headed by President Joko Widodo, have all tried to look beyond historical differences to attract Mainland direct investment, to get financial, technological and human support for major infrastructure projects, and to cultivate China as a market for Indonesia’s raw materials.
Still, Indonesian politicians who are seen being too friendly with China run the risk of losing significant voter support at home.

At every recent national election, conservative Islamic political groups have tried to play the China card in ways that reflect negatively on candidates they oppose.

In a Pew survey taken after the 2019 national elections in Indonesia, only 36% of the respondents had a favorable view of China, which means two thirds of the voting population had a negative view.
The pandemic made it impossible for Pew to include Indonesia in its most recent survey, but it is a safe bet that the unfavorable view of China has increased.

Not only is China seen as the source of the virus that still has Indonesia on its knees, but also the presence of large numbers of Chinese laborers in Indonesia working on China investments and infrastructure projects has fanned resentment by Indonesians, who have been wrestling with job losses amid the pandemic.
In addition to investing in Belt and Road programs, China has also invested in mining projects in Indonesia, while China’s tech investors have been focusing more on the country due to the large size of the population and the speed that new businesses like payments companies, meal delivery services and education platforms are being set up.

In one sense, this business should be having a stabilizing influence on Indonesia and its relations with China.
However, in other sense, it is also building up resentment among local Indonesians, who see Chinese companies profiting at their expense.

In other words, the new investment is doing little to reduce the historical animosities and suspicions Indonesians feel toward China and Chinese.

As a former Dutch colony, Indonesia has also long been deeply suspicious of foreign investment from Europe and other foreign sources, including the US and Australia.

In short, the country is highly protectionist.


It has a stable relationship with the US, but not one that is particularly close.

In the 2019 Pew survey, only 42% of the respondents had a favorable view of the US.

This was better than the view of China, but it made Indonesia one of the most negative Asian countries in its population’s assessments of the US.
Little has happened in the past year to change this view, and if a survey was undertaken today, the percentage breakdown would probably be close to the same.

This would place Indonesia near the middle of the horizontal axis assessing the extent that the US is a stabilizing or destabilizing influence, while the position on the vertical axis is still probably around two-thirds of the way down, representing an overall destabilizing impact of China on Indonesia.
July 14, 2021 ASIAN INTELLIGENCE Page 7 Political & Economic Risk Consultancy, Ltd. Issue #1,072 The new Biden government has said it will put human rights issues at the forefront of US foreign policy.

If that really is the case, new strains in US-Indonesian relations are likely.

A 2020 US State Department report on Indonesia was highly critical of the human rights situation in Indonesia.

However, so far the Biden administration has refrained from singling out Indonesia for criticism.
Maintaining stable, favorable relations with Indonesia is consistent with other priorities of the US in the region, including US policy toward navigation in the South China Sea and Washington’s desire not to make it easier for China to gain influence in the region.

JAPAN Comments Over the past year, public sentiment in Japan has turned more against China and more in favor of the US.

The biggest single change has been the election of a new US president.
According to the latest Pew survey, Japanese clearly have more confidence in Mr. Biden than they did in Mr. Trump.

In late 2019, only 34% of the Japanese surveyed indicated that they had confidence in Mr. Trump to do the right thing regarding world affairs, whereas in the most recent survey, results of which were released in June, the percentage of respondents holding this view about Mr. Biden jumped to 73%.
Over the same period, the percentage of Japanese who said they have confidence in Chinese President Xi Jinping to do the right thing in world affairs declined to only 10% from 14%.

The difference is consistent with the more positive view that most Japanese have of the US compared with China.
Beijing’s clampdown on Hong Kong, its increasing threatening action toward Taiwan, and the way it is stepping up claims to islets and waters also claimed by Japan all contribute to the negative bias many have toward China – a bias that has increased over the past year.

In the latest Pew survey, only 10% of the Japanese respondents had a favorable view of China, down from 14% in late 2019.
In contrast, President Biden’s attempts to reach out to allies like Japan, to rejoin the Paris Climate Accord, and to put multilateralism at the heart of his administration’s foreign policy have improved the image of the US among Japanese.

In the latest Pew survey, 71% of the respondents held favorable views of the year, up from 68% a year ago.
Japanese are critical of the way both China and the US have dealt with the coronavirus outbreak, although with virus having originated in China, Japanese are especially critical of Beijing’s handling of the pandemic.

Only 24% of the respondents said China has done a good job.

The US got poor marks for the way former President Trump’s administration initially handled the pandemic, but it has gotten better at dealing with the pandemic as time has gone on, especially since Mr. Biden took office.
Still, only 40% of the Japanese who responded to the Pew survey said the US had done a good job.

While Japanese see the US as the country’s most strategic ally for national security purposes, the past year has also fortified their belief that the US is more important for the country economically than is China.
For a number of years, Japan’s increasing engagement with the Mainland – in terms of trade, investment, tourism, and other factors – was contributing to a belief among most Japanese that China was growing in importance economically, whereas the US was starting to lose some of its economic importance.

However, the US economic recovery, supported by the Federal Reserve’s easy monetary policy, has put the spotlight again on the importance of the US.
Fully 81% of the respondents in the last survey said it is more important for Japan to have strong economic ties with the US than it is with China, while only 15% thought it was more important for their nation to have strong economic ties with the Mainland (the difference was accounted for by those who did not answer this question or volunteered another response).
Perhaps one of the biggest changes in its foreign policies that Japan has made since Mr. Biden became president is the way Tokyo has become one of the strongest supporters of Mr. Biden’s foreign policy initiatives.

Page 8 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd.

When Mr. Trump was in office, Japan saw its role more of picking up the balls that the US dropped and keep running with them.
Typical of this was the way Tokyo kept pushing the Trans-Pacific Partnership pact through to implementation after Mr. Trump unilaterally turned has back on this initiative.

However, since Mr. Biden has taken over and is embracing a more multilateral approach to dealing with critical foreign policy issues, especially when it comes to dealing with the challenges posed by Mainland China, Tokyo has changed its role to being the US’s wing man, supporting the US leadership in new initiatives.
The government of Japanese Prime Minister Yoshihide Suga has not only promised to boost Japan’s defense capabilities and role in the broader security of the region, but also has echoed Mr. Biden’s call to European nations to have a stronger military involvement in the Asia-Pacific and to work together to pressure on Beijing to modify behavior that is threatening to regional and global stability.
However, what is unclear is if Japan is any closer than before in trying to amend its constitution so its military can raise its profile.

Japan’s population is still divided on this issue.

The lack of confidence in US security support caused by former President Trump’s protective unilateralism could have been a factor that the Japanese government might have used to convince more Japanese that the pacifist constitution would have to be amended.
However, now that Mr. Biden is re-emphasizing the US commitment toward Japan and is trying to rebuild trust, it could be more difficult for the government to convince the public that a constitutional change is needed.

MALAYSIA Comments There has been little change in Malaysia’s relations with either the US or China in the past year.

China has been more active in engaging with Malaysia than the US has been, and the change of presidents in the US has not really changed this.
So far, the Biden administration has been focusing much more on its relations with Northeast Asia than it has with ASEAN.

The result is that there have not been many new points of frictions, but neither has there been any evidence to point to an improvement in US-Malaysia relations.

China’s influence over Malaysia has been increasing slowly, but the US has not tried very hard to counter this drift.
Consequently, the Malaysian government is largely embracing China’s institutions and regional development architecture like the Belt and Road Initiative.

It has adopted a nuanced strategy toward China, welcoming investment, trade, and technology from China while pushing back on certain principles, the most notable of which is Malaysia’s claims to waters in the South China Sea that China also claims and to China’s frequent military incursions into these waters.
The population’s sentiments toward the Mainland are not nearly as negative as in many other countries in the region such as Indonesia and Vietnam.

Ethnic Chinese Malaysians feel comfortable with China, while ethnic Malays are more biased against ethnic Chinese Malaysians than they are against Mainland Chinese or the Beijing government.
There have been no recent public surveys we know of assessing Malaysian opinions of the US and China or confidence in either President Biden or President Xi, but in a 2015 Pew survey, 78% of the Malaysian respondents had a favorable view of China.

This was more than any other Asian country except Pakistan.

In a different Pew survey that same year, only 54% of Malaysians had a favorable opinion of the US.

This was third from the bottom in the list of Asian countries surveyed.
Only China and Pakistan had a smaller percentage.

Back in 2015, the Pew survey showed 53% of Malaysians considered the US to be the world’s leading economic power, while 33% considered China to be the leading economic power.
If the survey were taken today, we suspect the gap would be smaller, and if the question were rephrased to ask whether the US or China was July 14, 2021 ASIAN INTELLIGENCE Page 9 Political & Economic Risk Consultancy, Ltd. Issue #1,072 more important for Malaysia, it is possible that more Malaysians would place China over the US.

Back in 2015, 45% of the Malaysians surveyed by Pew believed that China would eventually overtake the US in terms of power and influence.
In general, Malaysians have held more negative views of the US than they have a China for a number of years.

However, it is very likely that these perceptions have less to do with how Malaysians perceive US policy toward their own country than they do with the extent that Malaysians are critical of the way the US has conducted is policies in many strife-torn Muslim countries, including Afghanistan, Iraq, and Syria.
China compares favorably in the minds of many Malaysians because it has steered clear from all these conflicts.

Malaysians in general do not support ISIS.

Indeed, the group is considered a terrorist organization and is outlawed in the country.

But in the 2015 Pew survey, only 28% of Malaysian respondents said they supported the US military actions against ISIS in Iraq and Syria, while 45% said they opposed the US actions.
The policies of the Biden administration to extract the US from some of these conflicts would probably be approved by most Malaysians, but not enough to put the US above China in an survey of popular views.

PHILIPPINES Comments The Philippines was included in previous Pew surveys measuring different countries’ perceptions of leadership in the US and China, but it was not included in the most recent one due to the COVID-19 lockdown.
A year ago, we analyzed that the Philippines was likely to backtrack on President Rodrigo Duterte’s strategic shift toward China.

In part, that analysis was based on the failure of this shift to produce the desire economic benefits for the Philippines that Mr. Duterte was counting on.

It was also due the strong positive feelings many Filipinos still had for the US.
The pro-US groups included many senior military leaders, politicians and business executives, but the bedrock of support was from average Filipinos.

In the Pew survey conducted in late 2019 and published in early 2020, 42% of respondents in the Philippines had a favorable view of China, which was more than any other Asian country and an indication that many of Mr. Duterte’s supporters were still optimistic that his shift would produce positive results for the country.
However, 80% of the respondents had a favorable view of the US (which means than many respondents had favorable views of both the US and China).

This was this highest percentage of any Asian country covered in the survey and second in the world, behind only Israel.

Indeed, Filipinos were so favorably disposed toward the US that they had more confidence than any other country in the Pew survey that President Trump would do the right thing regarding world affairs.
If a survey were held this year to reflect how views have changed, it is very likely that local views toward China and President Xi would have deteriorated, while views toward the US and the Biden government would be even more positive than those held last year about the S and the Trump administration.

Mr. Duterte still does not like the US, and as long has he is president, the Philippines is unlikely to shift back toward the US in its relationship.
The benchmark by which that relationship is measured will be the status of the Visiting Forces Agreement (VFA).

The 23-year-old pact has been in limbo – neither renewed nor abandoned – for over a year now when Mr. Duterte withdrew his support and threatened to scrap the agreement.

So many of his advisers and military staff were against this move that the termination has been put off several times.
Since elections are due less than a year from now and Mr. Duterte is not eligible for another term, it is very likely that the VFA will stay suspended until then but its renewal is likely to be one of the first acts of next government.

Page 10 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd.
However, Mr. Duterte’s refusal to personally mend ties with the US and to engage with the Biden administration does not mean he is likely to keep embracing China as warmly as he has been doing.

With or without the support of Mr. Duterte, parts of his government continue to defend the Philippines’ claims of waters and islets currently being occupied by Chinese fishing vessels acting as a militia for Beijing to supplement the powers of the PLA in the region.
Moreover, despite Mr. Duterte’s cold shoulder, the Biden administration has continued to back the Philippines in the dispute around Whitsun Reef.

Some observers are arguing that the Philippines still has a lot of leverage with which to extract more payments from the US in exchange for renewing the VFA.

They claim that the pact is a critical part supporting the entire US strategy for countering China’s military power in the South China Sea.
However, this is probably an exaggeration, especially since Mr. Biden’s strategy of working more closely with allies in the region and cooperating more in military matters does not leave it nearly as isolated in its effort to keep the regional sea lanes open for navigation.
Most importantly, however, while the US might have “lost” Mr. Duterte, it has not yet lost the Philippines, and with Mr. Duterte likely to be gone in less than a year, the trend seems to be to preserve the status quo until conditions are ripe to make another formal diplomatic shift, this time back toward the US.
SINGAPORE Comments As the US and China have both moved in the direction of more confrontational relationships over the past four years, Singapore has responded by trying to stay equidistant from both.

It is a modern form of neutrality that is consistent with many aspects of the island’s desire to develop its hub roles in a variety of businesses, including banking and finance, tech companies, and legal services.
The new neutrality does not mean refusing to take sides in the differences between Beijing and Washington.

On some issues like keeping the sea lanes of the region open to international navigation, Singapore openly supports the US position because it is consistent with its own interests.

However, Singapore does not want to be drawn into one camp or the other; it wants to be friends with both – and to the extent that friendship includes trust – it wants to be trusted by both.
Picking sides runs a very real risk of losing business to the other side, and Singapore wants the business with both.

The competition with Hong Kong for certain types of business that involve Mainland China is intensifying, and Hong Kong’s being drawn more under the direct influence of Beijing gives it an edge over Singapore for some types of China-related business.
However, because Hong Kong, by the very nature of China’s increasing influence, is losing “neutrality,” the more Singapore will stand out as the place offering greater impartiality.

This is already benefitting Singapore’s judicial system and its role as an international arbitration center.

The number of new cases handled by the Singapore International Arbitration Center more than doubled last year to 1,080.

It is no coincidence that India, the US and China filed the most cases as foreign users.
Neither India nor the US are likely to trust Hong Kong like they once did, and Singapore is an acceptable alternative from China’s perspective too.

Similarly, tech firms are flocking to Singapore to set up regional offices.
There are numerous reasons for this, but one is that there is less risk in Singapore than in Hong Kong that industry giants could be held to the same liability and legal risks they would face in Hong Kong as laws there relating to data and social networking content are tightened to clampdown on political dissent.

The national security law in Hong Kong is so new and so vague that the tech firms feel increasingly uncomfortable.
The new Pew survey indicates that the thinking of the Singapore public is very much in line with the government’s own thinking on the need to stay friends with both China and the US.

Of the respondents to the latest survey, 64% held a favorable view of China, while 51% held a favorable view of the US.
They were even more evenly split in their confidence in the political leaders of the US and China to do the right thing regarding July 14, 2021 ASIAN INTELLIGENCE Page 11 Political & Economic Risk Consultancy, Ltd. Issue #1,072 world affairs.

Both President Biden and President XI received a confidence rating of 70%.

This made Singapore the only place covered by the latest Pew survey where there was no difference in confidence.
In all other places surveyed, people expressed more confidence in Mr. Biden than they did in Mr. Xi.

Similarly, Singapore was also the only place where respondents said it was more important for their nation to have strong economic ties with China than with the US.

In Singapore 49% of the respondents chose China, compared with 33% who chose the US.

This compared with the median response of all the countries covered in the survey of 27% favoring China vs. 54% favoring the US.
SOUTH KOREA Comments Korea is moving closer to the US and, in the process, its relations with China are becoming more delicate.

There are several reasons for this shift.

The most important is the change in the US presidency.

The whole approach of the US government in managing its alliances in Asia, the foremost one being the tripartite alliance the US shares with Japan and South Korea, has changed.

Under former President Trump, little attention was paid to maintaining a smooth three-way relationship.
Instead, he treated Korea and Japan more as bilateral relationships in which the US wanted better trading terms and the Asian countries to pay more of the cost of maintaining the US security umbrella.

In contrast, Mr. Biden is paying a lot more attention to buttressing security cooperation between the three countries.
He has put pressure on Korea and Japan to do more to keep their own differences in check while pushing for more open cooperation in trilateral security to counter threats posed by China and North Korea.

The current government in South Korea, under President Moon Jae-in, while always professing its strong commitment to its alliance with the US, has resisted pressure to more overtly confront China.
For example, during the Trump administration, the South pushed back against US requests to stop South Korean companies from working with Huawei.

Seoul has been more reluctant than Tokyo to publicly side with the US on issues that did not directly affect Korea like the defense of Taiwan’s autonomy and the Quad military alliance.

Korea did not join international criticism of the way Beijing is increasing its control over Hong Kong or its treatment of ethnic minority Uyghurs in Xinjiang.

Mr.
Mr.

Moon has tried to avoid antagonizing China, which is Korea’s largest export market and also, from Mr. Moon’s perspective, a potential conduit to re-engage with North Korea.

However, Mr. Biden’s push to raise the profile of key US multilateral alliances to cooperate more openly in a shared agenda is forcing Mr.

Moon to take positions that reflect Washington’s stance even if it risks angering Beijing.

Consequently, Mr.

Moon is now also talking about working with the Quad.
Korea has agreed to take part for the first time in major US-Australian joint military exercises scheduled for this month that are widely seen as being aimed at countering an increasingly assertive China.

Personnel from New Zealand, Canada, the UK and Japan will also participate, while France, India and Indonesia will serve as observer nationals.

Shortly after first meeting with President Biden this year, Mr.
Moon voiced views for the first time that reflected more closely his support for other key US positions that are obviously at odds with China.
For example, the two leaders made a joint statement opposing all activities against “the rules-based international order.” They also pledged to maintain “freedom of navigation and overflight in the South China Sea and beyond,” and emphasized “the importance of preserving peace and stability in the Taiwan Strait.” This was the first time Taiwan was raised during a US-South Korea summit, and prompted China to respond with a warning that Taiwan is purely an internal affair.
A month later, in May of this year, the US removed caps on ranges and payloads for South Korean missiles, allowing Korea to develop armaments that can reach behind the Korean peninsula – a move intentionally designed to catch the attention of China and Russia, while potentially giving North Korea an excuse to accelerate the development of its own missile program.
The South’s push to strengthen its military capabilities advanced further this month when it successfully tested a submarine-launched ballistic missile.

Page 12 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd. Pressure from the Biden government is not the only reason the South Korean government is cooperating more with the US even if it means hurting its relationship with China.

Domestic pressure is also bearing on the Moon government.

Mr.
Mr.

Moon is barred from running for another term, but his Democratic Party is starting to lose support and could be in trouble, judging from its recent losses in key mayoral races in Seoul and Busan at the hands of the opposition, which has accused President Moon of kowtowing to Beijing.
A number of recent surveys show average Koreans are holding increasingly anti-China views, with younger Koreans – a group that had been Mr. Moon’s and the Democratic Party’s main support base – feeling especially strongly.

According to one survey by the conservative Donga Ilbo newspaper, while nearly 53% of South Koreans said they supported the country joining the Biden’s administration’s efforts to counter Beijing, this percentage rose to 66% among those in their 20s.
Local biases against China have been aggravated by what some see as economic bullying by Beijing, its poor handling of the COVID-19 crisis, and the assertion by some Chinese that some cultural and heritage foods and goods with which Koreans identify as being uniquely Korean (like kimchi) actually have their roots in China.
Feelings against China are currently running so strong in the South that half a million Koreans quickly signed an online petition calling for the government to cancel the construction of a tourist-focused “Chinatown” in South Korea’s eastern Gangwon province, while another petition quickly got 300,000 signatures opposing a Ministry of Justice proposal to ease the pathway to citizenship for children born to long-term foreign residents when it became clear that ethnic Chinese would be by far the main beneficiaries of such a reform.
While the image of China among average Koreans has deteriorated over the past year, that of the US has improved.

According to the latest survey by Pew, 67% of the Korean respondents had confidence in President Biden to do the right things regarding world affairs.

This was up from only 46% who said they had confidence in Mr. Trump’s ability when asked the same question a year and a half ago.
In contrast, confidence in Xi Jinping’s ability to do the right thing fell to only 15% in the last survey from 25% in the previous one.

More than three- quarters of all Koreans surveyed (77%) held more favorable views of the US than China, while only 22% had a more favorable view of China compared with the US.
Also, despite the larger value of Korea’s trade with China, 75% of Koreans see more value in maintaining close economic ties with the US than with China, while only 17% rated the economic importance of China higher than the US.

TAIWAN Comments Taiwan is one place in Asia where the US and China are both trying to draw a line in the sand warning the other side not to cross it or risk war.

Each side keeps trying to test the other by inching as close to that line as possible.
Those tests have recently included stepped up military pressure by Beijing, with frequent flights by its air fore into Taiwan’s air defense identification zone, and a high profile visit to Taiwan by a group of US senators who flew in on a US Air Force plane carrying 750,000 COVID-19 vaccines.

Both Beijing and Washington seem to have an interest in playing up the risk that a military conflict over Taiwan could be imminent.
China’s leaders are open in their threats to use force to retake Taiwan if it tries to become independent or if it tries to engage with other countries like the US and Japan or with institutions like the UN in ways that give it de facto independence and ignore Beijing’s claims of sovereignty over the island.

The current US government finds it useful to take these threats at face value and giving them an immediacy that might not really be warranted.
For example, last March US Admiral Philip Davidson, who at the time headed the US Indo-Pacific Command, warned that China could attempt to take over Taiwan within the next six years.
More recently, his successor, Admiral John Aquilino, said a Chinese attack on Taiwan could be launched “much closer to us than most think.” July 14, 2021 ASIAN INTELLIGENCE Page 13 Political & Economic Risk Consultancy, Ltd. Issue #1,072 While one interpretation of China’s recent military incursions is that they are practice for an actual invasion that could happen any time, it is much more likely that their real significance is to signal Beijing’s displeasure on the success the Biden government seems to be having in mobilizing the support of other countries for Taiwan.
This is the big change that has happened in the past year.

In part, it reflects how Beijing might have overplayed its hand in trying to limit Taiwan’s ability to cooperate with other countries in fighting COVID-19.

The rest of the world interpreted this less from the perspective of Beijing’s rights as a sovereign power than as a hindrance for the world to get a pandemic threatening all under control.
It was a small step from here for the US to convince other countries that Beijing’s crackdown on Hong Kong is destabilizing for the world, as would be any military action initiated by China to take back Taiwan.
What has upset Beijing most is that the Biden government has not only maintained the hard line on trade with China that the Trump administration initiated, but also that it has, in a very real sense, reduced Taiwan’s international isolation by getting allies of the US like Japan, South Korea, the UK, and bodies like the G7 to join the US in warning about China’s actions that are raising tension in the Taiwan Strait.
Now the US is reducing Taiwan’s international isolation one step further – and, in the process, discrediting Beijing’s ability to enforce its sovereignty claims, by restarting talks with Taiwan under the Trade and Investment Framework Agreement.

The talks will enable both Taiwan and the US to put a stronger focus on trade to match their efforts to bolster security and political ties.

Semiconductors are one area that the US and Taiwan might agree to cooperate on in ways that run against China’s interests.
While the image being laid out for the global public is that the Taiwan Strait is one of the world’s major flashpoints and the threat of a war could be quite close, more seasoned observers are less concerned with the immediacy of the risk.

For China to invade militarily, President Xi Jinping would have to feel he has no other option or be so confident of a quick victory that there is no reason to delay.

However, at this point, he still has many options, and he cannot be confident of a quick, easy victory.
To be sure, China has around 100 times as many ground force personnel as Taiwan and a military budget 25 times as large, but there are many things that could go wrong with an invasion, any one of which could spell huge political problems for President Xi and might even cost him to fall from power.

Other than really seasoned observers, another group that does not seem to be overly concerned with the immediacy of a military threat from the Mainland are average Taiwanese.
Perhaps because most have only known the status quo there is a large degree of confidence among people in Taiwan that China will not actually use military force to retake the island anytime soon.

In the most recent Pew survey, more Taiwanese had a favorable view of China (27%) than did Japanese (10%) or South Koreans (22%).

More Taiwanese also had more confidence in President Xi’s ability to do the right thing regarding world affairs (25%, compared with 10% of Japanese and 15% of Koreans).
Interestingly, more Taiwanese said China did a good job dealing with the coronavirus outbreak than they credited the US for doing (30% vs. 15%).

However, 49% of Taiwanese still see more value in close economic ties with the US, whereas only 23% said it is more important for Taiwan to have strong economic ties with China.

The economic draw poses an interesting point.


While leaning toward the US economically, a smaller portion of Taiwanese did than did Japanese and South Koreans (81% and 75%, respectively).

Taiwan is still not so close to the US that it feels Washington can dictate the terms of the relationship.

This is true with respect to the arms purchases its makes from the US and the amount that it spends on its own defense (Washington wants Taiwan to do more).

It is also true with respect to the terms of trade.
As much as Taiwan would like to be a member of multilateral bodies like the Trans-Pacific Partnership and to sign free trade agreements with governments like the US and the EU, Taiwanese still feel strongly about accepting all the terms these foreign governments are demanding.
For example, one of the reasons the Biden government is willing to discuss ways to deepen economic ties with Taiwan over opposition from Beijing is because Washington wants Taiwan to follow through with a commit to open its market to US pork.

However, it is not at all clear how Taiwanese will vote on Page 14 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd. that particular issue in a referendum currently scheduled for August.
If they were to vote against accepting US pork, it might well derail the entire trade talks, and rather than risk this happening it is possible that the Taiwan government might use the threat of COVID as excuse for delaying to referendum.

However, this would only delay a problem that will have to be confronted sooner or later.

THAILAND Comments The Thais are too beset by crushing domestic problems to pay much attention to developments beyond their shores.
Their focus is on the out-of-control pandemic, the economic recession, and a government widely regarded as the most incompetent in Thailand’s modern history President Biden was elected just before the full weight of the present crisis hit Thailand.

According to Pew Research, the Thais had maintained a positive view of the US during the Trump years although that sentiment was distinctly tepid.

Trump’s personal rating was almost the same as that scored by China’s President Xi Jinping.
Trump did not make himself more popular with the Thais by receiving the 2014 coup leader, General Prayuth Chan-ocha at the White House.

President Obama’s administration had cold-shouldered the military regime in Bangkok after they overthrew the elected government in 2014, although the armed forces in both countries maintained normal relations.
There has been a surge of good feeling for Biden among Thais, although they recognize that his disapproval of their military-dominated government might strain bilateral relations.

Thais also worry that their country is relatively low on the list of priorities of the Biden government, a perception that was heightened after US Secretary of State Antony Blinken recently canceled a scheduled meeting with his ASEAN counterparts.
Early on, the Thais liked Trump’s strong-man image, but he fell out of favor for failing to make the visit he had promised.

Ultimately his unpredictability and disruptive decision-making unnerved average Thais.

They now feel safer with Biden as president.

Trump’s failure to handle the pandemic contrasted acutely with Thais’ admiration for President Xi’s management of that crisis.
They applauded Xi’s success in curbing the spread of COVID and China’s free handout of vaccines in several areas of the world.

They appreciated Xi’s immediate dispatch of medicines and hospital equipment when Thailand was hit by the virus.

This is one reason why Xi’s approval rating has not sunk as it has in Western countries.

Recently, though, the positive image has been damaged by arguments over the merits of Chinese vaccines and reports of irregularities in their distribution.
The interests of the giant CP group in the vaccines are also being questioned, especially since Forbes Asia reported that the fortune of the family owning CP rose by US$3 billion to US$30.2 in the past year.

Western nations’ ongoing vilification of China is not supported by many Thais, but there are differences in the country over just how close the government should work with China and risk hurting relations with other countries.

Thais instinctively support the notion of power balancing.
Being friends to all fits their psyche.

Thus, they are determined to avoid being drawn into the US-China disputes and their leaders will remain silent about Beijing’s threats to Taiwan, its repression of dissent in Hong Kong, its handling of the Uyghur minority, and its aggressive expansionism in the South China Sea.
Thailand’s military-dominated government clearly is leaning more toward Beijing than toward Washington, which is understandable considering that China has been openly supportive of the Thai generals’ July 14, 2021 ASIAN INTELLIGENCE Page 15 Political & Economic Risk Consultancy, Ltd. Issue #1,072 seizing of political power, whereas the US has been critical of both the loss of democracy and the clampdown on certain personal freedoms.
However, the broader military is not completely aligned with the government’s position toward China and the US – so much so that Prime Minister General Prayuth has stopped proclaiming that China is Thailand’s “number one partner.” He must be aware of the widespread feeling, including within the military, that the country has come to rely too much on economic and other ties with Beijing.

Senior officers in those groups have openly called for closer military ties with the US and fewer with China.
King Vajiralongkorn is believed to take a similar view.

The government responded to anti-Chinese sentiment with unsuccessful attempts to convince the population that the rise and fall of Trump exemplified the inherent weakness of the democratic system.

However, the links with the Chinese are too solid to lessen significantly.

China is showing more support than other countries for Thai plans to transform the economy via the grandiose Eastern Economic Corridor project.
This support includes providing money and technical expertise, but the Thais are striving to ensure that other nations, particularly the US, Japan and EU members, retain significant shares in their trade and inward investments and to keep engaged with them on security and defense issues.

VIETNAM Comments Vietnam has never been included in the Pew survey, which is not the kind of public opinion poll the country’s Communist government would ever feel comfortable permitting.
As far as the Vietnamese authorities are concerned, they want to maintain a facade of peaceful cooperation with Beijing even though they really do not trust China and are extremely wary of becoming too dependent on it.

And Vietnam's Communist Party still looks to China as a model of how to keep an authoritarian state in power in the Internet age.
Similarly, Hanoi might want the US to stay in the region to act as a counterbalane to China, to ensure the South China Sea stays open to navigation, and to stay as a leading growth market for Vietnam’s exports, but there is still a deep distrust of the US and a desire not to be seen as a military or strategic ally of the US.

Still, there is little doubt how average Vietnamese would have responded to the latest Pew survey questions.
No country weighs on Vietnam like China, and it has been that way for centuries.

The percentage of respondents who hold a favorable view of China would probably have been extremely low – less than any country actually covered in the survey, including Japan, which was the country with the least favorable view of China (10% of respondents).
If the only alternative to China were the US, this means the percentage of respondents who hold a favorable view of the US would have been one of the highest of any country.

However, many Vietnamese hold more favorable views of other countries than either the US or China.

For example, some might rate Japan as being the most important for Vietnam, while others might vote for South Korea, and others might look to the EU.
Consequently, the gap under 100% left after deducting scores for the US and China might have been wider for Vietnam than for other countries covered by this newsletter.

There is also little doubt that very few Vietnamese repondents would express having any confidence in President Xi Jinping to do the right thing in world affairs.
The way China has increasingly asserted its claims to areas in the South China Sea also claimed by Vietnam would probably have caused this score to deteriorate over the past year, but it is already so low that it could not sink much more.

In contrast, Vietnam’s confidence in President Biden to do the right thing regarding world affairs would probably be in the 70%-plus range, which would have been much higher than the score they would have given Donald Trump when he was president.
Mr. Trump was too inconsistent for most Vietnamese to feel comfortable.

They could see how shabbily he treated his allies and how transactional he was, and this would have made them feel vulnerable to depending on him too much.
In contrast, Mr. Biden is doing more to strengthen the US alliances with countries like Korea, Japan, Page 16 ASIAN INTELLIGENCE July 14, 2021 Issue #1,072 Political & Economic Risk Consultancy, Ltd. Australia and the EU, all of which are important to Vietnam and, collectively, act as a more effective coiunterbalance to China than they would if they were less united in the approach to China policy.
The question on whether Vietnamese see more value in close economic ties to the US or to China is really phrased wrong for Vietnam.

It is not just that the vast majority of Vietnamese would pick the US ahead of China despite the large role played by the Mainland as a supplier, market and source of direct investment.
More to the point, Vietnam is one of the few countries where anti-Chinese feelings and suspicions run so deep that there are recent instances of people mounting destructive demonstrations to block their government from allowing China to open economic zones in the country.

Chinese-owned factories have been damaged, and when China parked an oil rig in contested waters in 2014, anti-China rioting left at least a dozen dead, including four Taiwanese mistaken for Chinese.
Feeling against China still run so strong that average Vietnamese are reluctant to take Chinese-made COVID-19 vaccines as much because they do not want anything to do with China as because of their lack of trust in the efficacy of the vaccine.

Vietnamese views toward China have been shaped by centuries, not by just China’s recent actions.
Vietnaese are convinced that China economic and political resurgence is accompanied by a mentality in which China and its leaders think they are at the center and they want to turn everybody else into its subordinates.

Beijing firmly rejects this view, but that will not stop Vietnam from thinking the way it does, and feelings run as deep in Vietnam not to accept such a subordinate role as they do in places like Japan, India, South Korea and Indonesia.
July 14, 2021 ASIAN INTELLIGENCE Page 17 Political & Economic Risk Consultancy, Ltd. Issue #1,072 .

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